Trade Arrangements Research Articles

USMCA and Uneven Regionalized Protectionism: Automotive Industry in Mexico under US Corporate Control

Despite the growing literature insisting in showing the advantageous effects that the USMCA has for the Mexican industrial and labor development, this article seeks to offer a critical and historical explanation that helps to understand the causes that led to the momentum of the USMCA and the subordinate role that Mexico has played—and will continue to do so under this new trade arrangement—in the increasingly strengthened process of unequal regional protectionism, which has historically played against Mexico’s domestic industrial development. The main argument in this article claims that the new rules of origin in the USMCA will have a clear and differentiated impact on the automotive firms operating in Mexico, benefiting US firms on the eve of the protection they require in the face of the great technological changes and increasing competition among the global auto firms.

Towards a Green and Inclusive Power Sector in the Greater Mekong Subregion

Abstract This paper examines the power sector and electricity market in the Greater Mekong subregion (GMS) and explores potential pathways for low-cost, low-carbon, and low-conflict development of the sector. The results show that implementing a smartly-designed regional power grid, combined with enhanced cross-border trade, can facilitate a transition to a 100 percent renewable electricity supply. It projects a three-fold increase in energy demand by 2050 and highlights the need for a transition to low-impact renewable electricity sources. It utilizes modelling tools to analyze four scenarios and assess their impacts on electricity cost, carbon emissions, and environmental and social aspects. Results indicate that a scenario combining an expanded regional grid and cross-border trade, increased share of non-hydro renewable energy sources and energy efficiency measures yields the best outcomes. This approach reduces sectoral emissions, lowers costs, and minimizes conflicts. The paper recommends establishing coordinated and functional regional institutions, ratifying a regional grid code, and promoting standardized cross-border power trade arrangements. In conclusion, the report highlights the relevance of a well-designed regional power grid and cross-border trade for a successful transition. Implementing the recommended measures can lead to a greener and more inclusive power sector, ensuring the region’s long-term energy security and environmental sustainability.

Asset Pricing with Costly Short Sales

We study a dynamic general equilibrium model with costly-to-short stocks and heterogeneous beliefs. Costly short sales drive a wedge between the valuation of assets that promise identical cash flows but that are subject to different trading arrangements. In particular, we show that the price of an asset is given by the risk-adjusted present value of its future cash flows, which include both dividends and an endogenous lending yield that we characterize explicitly. This valuation formula implies that stocks with low and high shorting costs should offer similar risk-return trade-off once returns are appropriately adjusted for lending revenues and thus, sheds light on recent empirical findings about the explanatory power of shorting costs in the cross-section of returns. This paper was accepted by Lukas Schmid, finance. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.01887 .

From market-based development to value chain transformation: What markets can (not) do for rural poverty alleviation?

Market reforms are considered as an important strategy to support poverty reduction amongst small-scale agrifood producers in developing and emerging economies. Most attention is commonly focused on voluntary initiatives that provide a guaranteed minimum price to farmers and improve services for rural communities, supplemented by good agricultural practices for higher productivity, environmental quality and to support living incomes. Whereas alternative trade movements have become ‘mainstream’ their market shares are stagnating. Since agrifood markets have changed substantially and trade networks are restructured, smallholders are increasingly controlled by midstream agents (traders and processors) and captured into contract farming arrangements. This article outlines a new discourse around value chain transformation that supports local processing for income and employment generation and favours better integrated supply chains based on circularity and trust. It identifies new alliances between producers and traders that change market governance beyond simple adjustments in exchange relationships. Combining public investments (market infrastructure) with civic-driven organization (cooperation and contracts) and private networks (for profit redistribution along the value chain) offers interesting opportunities for linking sustainable business practices with value-driven trade arrangements.

The Indo–Russian payments corridor : Exploring and evaluating cross-border payment alternatives

In response to the Russian invasion of Ukraine, western countries have imposed a number of economic sanctions on Russia, including freezing its foreign currency reserves, restricting the flow of trade and cutting off its access to SWIFT. The sharp fall in euro and US dollar denominated transactions has in turn impacted Russia’s trade with India, as it is now harder for the two countries to exchange payments. In this context, this paper explores the messaging, clearing and settlement alternatives available for making/receiving payments between India and Russia. Specifically, the paper examines a rupee–ruble trade arrangement, central bank digital currency, the linkage of faster payment systems and card infrastructures, the Russian System for Transfer of Financial Messages, and bilateral messaging systems. In addition, the authors evaluate various considerations pertaining to these options, as well as the implications, from the perspective of central banks, banks and merchants/customers.

African Union (Au) and Challenges of Intra-African Trade: A Study of African Continental Free Trade Pact, 2018- 2023.

The study assessed the efforts of the African Union in addressing the challenge of poor intra-African trade using the AfCFTA between 2018 and 2023. The study specifically examined how the implementation of the AFCFTA impacted on intra-African trade profile, as well as how the African Union fared in deepening Africa’s market integration using the mechanisms of the AfCFTA. Anchored on the documentary method and Neo-functionalism, the study ascertained that the implementation of the AFCFTA has undermined the intra-African trade profile. The study also revealed that the African Union has not fared well in deepening Africa’s market integration using the mechanisms of the AfCFTA. Accordingly, the study contends that the AfCFTA deal, though a laudable initiative, may not surmount the enduring structural challenges to regional integration to reposition African economies and expand opportunities for all Africans as projected. The study thus underscores the fact that despite AfCFTA deal, Africa is likely to remain an ultimate loser in the growing regional trade arrangement which is a major feature of the world trading system. Among others, the study recommends that the African Union, through the mechanisms of AfCFTA, should work towards removing all non-tariff barriers and reducing tariff barriers that undermine intra-African trade. Keywords: AfCFTA, Intra-African Trade, Market Integration, Non-Tariff Barriers, Region Trade Challenges.

Research on Export Flow and Potential of Agricultural Products in China Based on Machine Learning Algorithm

The MLR (multiple linear regression) method in machine learning algorithm is a comprehensive method to study the correlation of variables, and it is also an important measure to study the relationship between variables by using linear fitting method. By combining qualitative analysis with quantitative analysis, this paper will use MLR model to make an empirical analysis of the determinants of agricultural trade flow, and use the estimated parameters to calculate the agricultural trade potential of China. The results show that the economic scale and distance have an important influence on the export flow of agricultural products in China, indicating that the economic scale is an important factor affecting the export flow of agricultural products. Regional trade arrangements have dual effects of trade transfer and trade creation, and free trade arrangements have created favorable conditions for trade expansion between countries with different demand and income levels. China's exports to Russia, Thailand, Singapore, the Philippines, Malaysia and Indonesia are in a state of deficiency, and there is still potential for developing agricultural products exports to these countries.

IS DE-DOLLARIZATION INEVITABLE?

Relying on relevant studies of internationally recognized economists, using content analysis, synthesis, and comparison methods, we monitor the process of de-dollarization, i.e. phenomenon of establishing a new balance of power in the global financial order. The main intention of the work is to project future directions of international monetary policy by pointing out the institutional and other barriers to the internationalization of the main contender for the status of global currency — the Chinese renminbi. The aim of the work is to provide guidelines to the creators of domestic economic policy in the context of the increased importance of non-Western currencies, and consequently, the need to rebalance the foreign exchange reserves and create the necessary infrastructure for the increased use of the Chinese currency on the domestic foreign exchange market. We conclude that despite a certain weakening of the global importance of the US currency — especially from the beginning of 2022 — the process of dedollarization is in its initial phase, and that could last for decades. Namely, in order to form a multilateral currency system, taking into account the current hegemonic status of the dollar, a substantial increase in the use of other currencies is necessary. This applies to world trade crediting, where the greatest, but still limited, progress of the yuan is seen, but also to the other domains such as the allocation of central bank’s foreign exchange reserves, the securities’ denomination, and the invoicing of financial transactions in bilateral trade and other arrangements.

Contribution of COMESA in the Fight Against Poverty in Zambia Through Trade Facilitation

Background: This study was undertaken due to high levels of poverty in the Common Market for Eastern and Southern Africa (COMESA) Member States. The study endeavored to explore the Contribution of COMESA in the fight against poverty in Zambia through trade facilitation. The study employed qualitative approach with an exploratory research design and critical case sampling to choose 13 key respondents to explore the contribution of COMESA in the fight against poverty in Zambia through trade facilitation. Primary data was analysed from 13 key respondents selected purposively using an interview guide to support secondary data. Data was analysed using thematic and content analysis. According to the World Bank (2017), trade facilitation contains provisions for expediting the movement, release, clearance of goods, goods in-transit, simplification, standardisation and harmonisation of procedures and associated information flows required to move goods from the seller to the buyer for payment. Zambia implemented COMESA’s simplified trade regime (COMESA-STR) for small cross- border traders. The Simplified Trade Regime (STR) basically aimed to formalise informal cross-border trade (ICBT) by putting in place instruments and mechanisms tailored to the trading requirements of small-scale traders that were decentralised to border areas where informal trade was rampant with the view to facilitate ease of access by small traders. The Simplified Trade Regime (STR) made possible for the small-scale cross-border traders to benefit from the COMESA’s preferential trading arrangement with the reduction of tariffs on selected goods. The concept One Stop Border Posts (OSBPs) was also implemented in Zambia and other related trade facilitation measures to support businesses.

Perdagangan Barang Impor di Pulau Sebatik Kalimantan Utara Perspektif Undang-Undang 7 Tahun 2014 Tentang Perdagangan

No country can create and produce all the goods and services needed to meet the needs of its population. The limited natural resources each country has cause international trade activities. This research explores further international trade in Indonesia. This research aims to analyze the legality of imported goods from Tawau, Malaysia, entering Sebatik District. Apart from that, how are the trade arrangements for imported basic necessities for residents of Sebatik Island, Nunukan Regency, regarding imported basic necessities entering Sebatik Island, Nunukan Regency? This research is a normative legal study. The approach used in this research consists of a statute approach and a conceptual approach. The types and sources of legal materials used are primary legal materials, secondary legal materials, and tertiary materials. The results of this research show that: first, trade in imported goods for basic materials in Sebatik according to Law 7 of 2014; second, trade according to Government Regulation Number 34 of 2019; and third, trade according to the 1970 Border Trade Agreement, which outlines the privileges of border residents, namely Sebatik Island; and second, the trade in imported goods that occurs is in accordance with the laws and regulations in force in Indonesia.

EU green deal: between ecological transition and the struggle for power maintenance

Environmental, social, humanitarian, and economic crises are part of the contemporary world. The exceeding of Earth's limits manifests in various ways, including climate change, whose effects are already impacting various regions of the planet. Although this issue has been discussed for decades and subject to extensive international legal regulation, there are areas with significant potential for mitigation and adaptation to climate change that remain relatively unexplored. While traditional international trade arrangements are insufficient to promote well-being and the preservation of life on Earth, there is fertile ground for collaboration between international trade and climate change regimes. The European Green Deal, launched as a political project for ecological transition, has economic and trade-related objectives and implications. That stated, the overall objective of this research is to uncover the inconsistencies of the European Green Deal concerning ecological law parameters and its implications for global trade. This is a bibliographical research with descriptive purpose, deductive approach, and axiological interpretation. From the analysis of the European Green Deal based on selected parameters of ecological law, it was found that, although it reflects progress in the implementation of ecological law, the political project serves as a mechanism for maintaining power, reproducing the dominant capitalist logic, which diminishes its own transformative potential in the transition to an ecological paradigm.

Sustainable development and the environment in EU and Japanese free trade agreements: embedding anthropocentric narratives

ABSTRACT New generation’ free trade agreements now include ‘Trade and Sustainable Development’ (TSD) chapters designed to improve environmental provisions within overall trading arrangements. The wide-ranging European Union (EU)-Japan agreement of 2018 represents the culmination of a trend towards the greater inclusion of such TSD elements, and, as it covers one-third of global GDP, the significance of this agreement for trading relations cannot be understated. Comparing it with other agreements involving Japan and the EU, I argue that greater attention to sustainable development in trade connections, notwithstanding tangible significant environmental improvements, further embeds an anthropocentric narrative of trade-environment linkages and supports a ‘win–win’ linkage between enhancing economic growth and ensuring environmental protections. Through an eco-centric critique, I seek to challenge the fundamental anthropocentric assumptions underpinning such inclusions and explore the ways in which the language of environmental protection and climate change has been depoliticised by a particular framing of sustainable development.

Formation of climate coalitions and preferential free trade: the case for participation linkage

We study the endogenous formation of climate coalitions linked to a preferential free trade arrangement. In a multi-stage, micro founded strategic trade and participation game, coalition and fringe countries dispose of a discriminatory tariff on dirty imports as well as emission permits imposed on domestic producers. Permits are traded on a common permit market inside the coalition and on local markets outside, respectively. We provide an analytical solution for the general equilibrium and the policy game, in the three country case, while the participation game is solved by Monte Carlo simulation. Moreover, conditional probabilities are computed for the transition to coalitions of various sizes induced by free trade. Under various regimes analyzed, we find that preferential free trade can create strong incentives for building effective climate coalitions in terms of depth and breadth. This result even holds if fringe countries are given the option of trade cooperation as a retaliation devise and is driven by a favorable shift in the coalition’s terms of trade. As a policy implication, negotiations on international climate treaties and free trade arrangements should be interlinked.

Fostering sustainability through environmentally friendly coffee production and alternative trade: The case of Café Orgánico de Marcala (COMSA), Honduras

Coffee has been a focal commodity for efforts to promote sustainability and social justice through alternative trade arrangements. Certifications such as Fairtrade have promised better prices, fair labor practices, environmental sustainability and improved livelihoods for small-scale coffee producers. A growing literature has examined alternative trade outcomes, but it remains an open question whether certifications help producers and their organizations improve livelihoods and conserve the environment. This study examines Café Orgánico de Marcala, SA (COMSA), which operates on principles of sustainability that emerged in conjunction with certifications. COMSA supports organic production through education and practices that integrate biodynamic principles, indigenous knowledge, and experimentation. COMSA has used fair trade premiums to build a multilingual school and start a recycling program, among other projects. Members and leaders acknowledge that problems exist yet point to progress. This ethnographic research uses grounded theory to examine COMSA’s approach to sustainability, its successes, and ongoing challenges.

The Everything But Arms (EBA) scheme and the EU’s normative dilemma: the case of Myanmar’s garment sector

Amid the escalation of the so-called Rohingya crisis and rising human rights concerns, EU institutions have repeatedly threatened a suspension of the Everything But Arms (EBA) trade arrangement with Myanmar, which is conditional on respect for fundamental human and labour rights. Despite Myanmar’s human rights situation having dramatically deteriorated, when in February 2021 the military seized power in a violent coup, the EU has failed to invoke a withdrawal of trade preferences. This article seeks to explore the rationale for the EU trade approach, which has so far received limited attention in the literature. By examining the case of Myanmar’s garment industry, which has been one of the most important sectors benefitting from EBA preferences, this article highlights the fact that, contrary to EU claims of a more assertive trade policy, EU trade decisions have been primarily influenced by normative dilemmas connected to the unwanted consequences of punishing trade instruments. In turn, the article shows that the EU’s normative dilemmas are paving the way for a targeted withdrawal of trade preferences.

The Arrest of Ship Regime in Nigeria: Lessons from South Africa

Nigeria and South Africa are the biggest economies in Africa, and they engage in substantial shipping and international trade. Therefore, effective shipping and trade legislation is a requisite for the resolution of disputes that may arise, and ship arrest is an important mechanism to resolve such disputes. This article employs the doctrinal legal methodology to reach a comparative analysis of ship arrest procedures in Nigeria and South Africa, and argues that the South African legal framework regarding ship arrest is more liberal and friendly than that of Nigeria. Given the plethora of trade arrangements involving both countries, this article recommends that Nigeria adopts some of the unique provisions of the South African arrest regime through legislation. It is also suggested that Nigerian courts should interpret the admiralty jurisdiction legal instruments to align with the local needs of the country.

In whose backyard? China and Latin America in the imperialist chain

This paper critically analyses the political economy of the US-China rivalry in Latin America, China’s penetration into the region since the early 2000s, and Washington’s response. It argues that a new form of Cold War rivalry is brewing in an increasingly multi-polar world: one that is shaping geopolitics, trade, and security arrangements, as well as potential conflicts in a ‘transitional’ process of ‘21st century imperialism’ for control and influence, where the US still dominates but where China is favourably placed. As Latin American leaders have welcomed ‘outsiders’ into America’s ‘backyard’, a consistent pattern of Chinese investment and construction has followed. While economic development and aid from China was secured, it was believed that greater regional integration and independence from US imperialism would also follow. The question remains whether fostering a relationship with China has meant greater independence from imperialism, or whether it has led merely to its regional transformation.

What has been the impact of Brexit on the UK economy?

What has been the impact of Brexit on the UK economy? Sarah Hall, University of Nottingham, considers the economic impacts of COVID-19 and the war in Ukraine from Brexit, which is critical if the economic impacts of the UK's new trading arrangements with the EU and the rest of the world are to be fully understood. There have been negative impacts on trade which can be largely separated from the impacts of COVID-19 and the War on Ukraine. Crucially, the devil is in the detail with such changes varying significantly by economic sector and by location in the UK. Whilst Brexit is only in its early stages economically, it is clear that its impacts are sectorally and regionally variegated. Explaining that examining some of these research highlights provides a valuable starting point for understanding the impact of Brexit on the UK economy, taken together, Hall's analysis suggests that the early economic impacts of Brexit on the UK economy do not neatly follow the estimates made by economists immediately following the referendum.

Ecologically Unequal Exchange and Farm Animal Welfare: An Empirical Analysis Using the Voiceless Animal Cruelty Index

ABSTRACT Ecologically unequal exchange theory explains that unequal trade arrangements between higher- and lower-income countries result in greater environmental degradation in lower-income countries. Farm animals are sometimes neglected by sociology because of their unique place between nature and society. Here, we extend ecologically unequal exchange theory to analyze trade relationships between higher- and lower-income countries and farm animal cruelty, using data from 2014. Results from regression analyses show that contrary to what we would expect based on ecologically unequal exchange theory, higher levels of exports to high-income countries from low- and middle-income countries is associated with lower overall farm animal cruelty and production of farm animal cruelty. We suggest that this may be the result of spillover effects, where the types of legislation meant to improve farm animal welfare passed in high-income countries are affecting lower-income countries, and call for more research into animal welfare, including research that examines changes over time as data become available.

Following the Water Uphill? The Spread of Blueberry Cultivation to the Mountains of Áncash, Peru / ¿Siguiendo el agua cuesta arriba? La expansión del cultivo del arándano en la sierra de Áncash, Perú

jlag Perspectives Landscape observers in Peru’s Áncash region have been concerned for over a decade about the impact of climate change on the shrinking glaciers of the Cordillera Blanca and the Santa River watershed (Bury et al., 2013). However, the Santa River valley, which is known locally as Callejón de Huaylas and is one of Peru’s most important Inter-Andean valleys, has been experiencing a second dramatic landscape change that has gone mostly unnoticed by outsiders. It has rapidly become covered by huge swathes of whiteplasticusedintheconstructionofhigh tunnels for blueberry production (Figure 1).1 Primarily for export, this production is transformingresourceuseaswellasvalleyaesthet ics ,withimpactsfordiversesectorsofsociety inÁncash.Furthermore,itsuggestspotential new trends in global agro-exports. CommercialblueberryproductioninPeru began in 2007 and has expanded rapidly throughanationalcampaignsince2012:from 50 hectares (ha) cultivated in 2012 to more than 18,000 ha in 2022 (Cordano, 2016; León Following the Water Uphill? The Spread of Blueberry Cultivation to the Mountains of Áncash, Peru¿Siguiendo el agua cuesta arriba? La expansión del cultivo del arándano en la sierra de Áncash, Perú Martha G. Bell Pontifical Catholic University of Peru Karl S. Zimmerer Pennsylvania State University and CEFE-University of Montpellier Odolin Saturnino Rodríguez Tinoco Institución Educativa 86648, Santo Domingo de Guazman - Yungay JOURNAL OF LATIN AMERICAN GEOGRAPHY 22(1), 1–11 Carrasco,2023).Blueberriesarecurrentlythe agro-export crop that generates the highest sales. In 2022, sales totaled US$ 1,435 million, approximately 14 percent of Peru’s total agro-export sales (Agraria.pe, 2023). Peru has also become the world’s leading exporter of the fruit (freshfruitportal.com, 2023), producing more than 276,000 metric tons in 2022 (Agraria.pe, 2023). This has corresponded to the larger expansion of “non-traditional agricultural exports” (NTAEs) across Latin America, which, beginning in the 1990s, saw production booms of grapes, avocados, mangos, asparagus, and other crops along Peru’s desert coast. This growth has depended on large-scale agribusiness and government investments in irrigation projects and “technified” agriculture as well as inexpensive labor and new trade and legal arrangements (Williams & Murray, 2019; Lombana, 2020; Crespi, 2022). Peru’s blueberry boom depends on distinctive varietal management and new geographic strategies for production. In 2023, the most prevalent blueberry varieties included Emerald and Biloxi, which are extra-large, firm, sweet, crunchy varieties that can survive cold storage and shipping (Ilyas, 2023). These are so-called zero or low chill varieties, which require reduced hours at cool temperatures (below 7 oC) compared to other varieties, and are thus suitable for Peru’s warmer temperatures (especially on the coast but also in the CalleFigure 1. Blueberries cultivated in high tunnels near Caraz, Áncash, Peru (Photograph by Marcia Castromonte, February 17, 2023). 2 Journal of Latin American Geography jón de Huaylas). In addition to these properties , which are common to agro-exports, blueberry expansion has required transforming new geographic spaces by subsuming previously “underutilized” lands into the agro-export model. While in previous agro-export growth these spaces have typicallybeenlocatedonPeru ’sdesertcoast,now itishigheraltitudezones,andspecificallythe inter-Andean valleys of Áncash, La Libertad, Cajamarca, and Piura—which are characterized by more abundant surface water, gentle rainfall, absence of frosts, and available land and labor—that are targeted for blueberry production (Cordano, 2016; Servicio Nacional de Sanidad Agraria del Perú, 2019). We focusourdescriptiononalltheseproduction factors, with special attention to the role of water availability in the upslope spaces. The cultivation of blueberries in Inter-Andean valleys has mainly occurred near the city of Caraz, which is located in the relatively wide, flat-bottomed Santa River valley known as Callejón de Huaylas. The Santa River is fed by glacier meltwater flowing down from the Cordillera Blanca, which contains some of the most important tropical glaciers in the world. During the twentieth century, agriculturalists in the Caraz area, including indigenous peasant communities (Comunidades Campesinas) as well as smallholders and medium-size farms, used irrigation to grow products for national markets. These included purple-kernel maize (maíz morado) used for the chicha morada beverage , Andean amaranth (kiwicha), artichokes, green beans, snow peas, and flowers. The surge of blueberry producFigure 2. High tunnels for blueberry growing in the valley bottom of Callejón de Huaylas, Áncash...